Bitcoin could be facing a potential collapse if it fails to maintain its key support level, warns popular crypto analyst Ali Martinez. According to Martinez, if Bitcoin drops below $93,806, it could plummet nearly 27% to $70,085. He bases his analysis on the Unspent Transaction Output (UTXO) Realized Price Distribution (URPD) model, which tracks the number of existing coins that last moved within a specific price range.
Martinez points out that some investors are already preparing for a bearish trend by sending their Bitcoin to exchanges for possible selling. In the past week alone, over 33,000 Bitcoin valued at more than $3.23 billion have been moved to exchanges, indicating a bearish sentiment among savvy investors. Additionally, more than $7.17 billion in Bitcoin profits were realized on December 23rd, showing that some investors are taking advantage of the current market conditions.
The analyst highlights a decline in the number of traders betting on Bitcoin rallying on the top crypto exchange Binance, further indicating a bearish outlook. The percentage of traders with open Bitcoin long positions on Binance dropped from 66.73% to 53.60%, signaling a shift in market sentiment. To flip the bearish outlook to bullish, Bitcoin needs to reclaim $100,000 as support on the daily chart based on the In/Out of the Money Around Price (IOMAP) metric.
According to Martinez, Bitcoin must sustain a daily close above $100,000 to invalidate the bearish outlook and potentially trigger a new rally towards $168,500. The analyst uses the Mayer Multiple, an oscillator that calculates ratios between price and the 200-day moving average, to forecast a potential rally if Bitcoin maintains its support above $100,000. However, at the time of writing, Bitcoin is trading at $95,855, down 2.3% in the last 24 hours.
In conclusion, the warning issued by crypto analyst Ali Martinez highlights the potential for a Bitcoin collapse if it fails to hold above $93,806. Savvy investors are already taking precautions by sending their BTC to exchanges for possible selling, while others are booking profits amid the bearish sentiment. With a decline in the number of traders betting on a Bitcoin rally and a need for the flagship cryptocurrency to reclaim $100,000 as support, the market outlook remains uncertain. Bitcoin’s ability to sustain above $100,000 could pave the way for a rally towards $168,500, as predicted by Martinez. Investors are advised to stay informed and monitor the market closely in the coming days to make informed decisions.
